## Fair and Inclusive Markets: Why Dynamism Matters

_IMF Working Papers, February 5, 2021_

## Source details

**Canonical URL:** [Fair and Inclusive Markets: Why Dynamism Matters](https://www.imf.org/en/publications/wp/issues/2021/02/06/fair-and-inclusive-markets-why-dynamism-matters-50052)

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## Bibliographic details
- Authors: Reda Cherif, Fuad Hasanov
- Published: February 5, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513568669.001

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### Overview
- Authors: Reda Cherif, Fuad Hasanov
- Date: February 5, 2021
- Core thesis: "We show empirical evidence that there may not be a tradeoff between market income inequality and high sustained growth, which is key for poverty alleviation."
- Central argument: Economies that achieved high sustained growth and low market income inequality are characterized by dynamism—a drive toward sophisticated export industries, innovation, and creative destruction and a high level of competition.
- Emphasis: "What a country produces and how much it competes domestically and internationally are important for achieving fair and inclusive markets."
- Scope: Exploration of policy options to steer industrial and market structures toward providing growth opportunities for both workers and firms.

### Key findings and evidence
- There may not be a tradeoff between market income inequality and high sustained growth; both can coexist.
- Characteristics of successful economies with both high growth and low market income inequality:
  - Dynamism toward sophisticated export industries.
  - Innovation and creative destruction.
  - High level of competition.
- Market structure determinants highlighted:
  - Production composition (what a country produces).
  - Degree of domestic and international competition.

### Policy options and implications
- The paper explores policy options aimed at:
  - Steering industrial structure toward more sophisticated activities.
  - Promoting innovation and creative destruction.
  - Increasing domestic and international competition.
  - Providing growth opportunities for both workers and firms.

### Subject areas and keywords
- Subject: Competition, Inclusive growth, Income, Income distribution, Income inequality
- Keywords: creative destruction, industrial policy, Inequality, innovation, laggard firm, manufacturing, market power, monopsony power, panel data, sophistication, supply firm, technology company, WP

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2021/02/06/fair-and-inclusive-markets-why-dynamism-matters-50052_